# Activating Stake Fee

{% hint style="info" %}
**TL;DR:** A one-time fee charged when new stake activates after winning the auction. Sized by how far the validator bid above the clearing rate (overbid × activating stake). Avoid surprises by setting `maxStakeWanted` to control incoming stake before bidding.
{% endhint %}

## Overview

The activating stake fee is a one-time charge on new stake delegated to a validator through the SAM auction. The fee is sized by how far the validator's bid sits above the auction clearing rate. The fee revenue funds the redelegation that brings the new stake in, which lets Marinade move more stake to high bidders and improves staker APY.

### Why this exists

Stakers trust Marinade to allocate stake to the validators that deliver the most value. All Marinade staking products that use SAM rely on this. SAM achieves it through an auction, where validators bid for stake. Stake then needs to be redelegated from lower-bidding validators to higher-bidding ones as bids change. Redelegation has a real cost: stake spends one epoch unproductive while it deactivates and reactivates, which reduces staker APY.

Without a way to fund that cost, Marinade can only redelegate when the bid revenue from the destination validator at least partially offsets the activation hit. In a slower bid environment, this means less redelegation and longer waits for validators to receive meaningful stake from SAM.

The activating stake fee unlocks this bottleneck. Validators who win new stake pay a fee that helps Marinade cover the cost of the redelegation that brought it in. The fee revenue funds further redelegation, which lets Marinade move more stake to high bidders. Validators get faster access to stake when they bid for it, and stakers get higher APY because their stake reaches better validators sooner.

### How payments work

Validators continue to pay the existing per-epoch payment on their active SAM stake. This is the auction bid payment described in the [SAM overview](/marinade-protocol/protocol-overview/stake-auction-market.md). The activating stake fee is paid **on top of** this, on activating stake only.

Activating stake means stake that Marinade just delegated to the validator.

The full payment for an epoch is:

```
payment = auctionEffectiveBidPmpe × activeStake / 1000  
        + max(0, bidPmpe - auctionEffectiveBidPmpe) × activatingStake / 1000
```

The new term is the activating fee. The size of the fee comes from the **overbid**: the gap between a validator's `bidPmpe` and the auction's `auctionEffectiveBidPmpe`. A larger overbid means a larger fee on each unit of activating stake.

Each unit of new stake is charged exactly once. It appears as activating in one epoch's snapshot, then transitions to active in the next.

### Worked examples

Two validators with the same auction rank pay the same activating fee, regardless of commission. A higher commission raises both `bidPmpe` and `auctionEffectiveBidPmpe` by the same amount, so the overbid that drives the fee stays constant.

#### **Example 1: scaling with the overbid**

Both validators have 100,000 SOL of activating stake.

|                         | Validator A | Validator B |
| ----------------------- | ----------- | ----------- |
| bidPmpe                 | 0.420       | 0.480       |
| auctionEffectiveBidPmpe | 0.387       | 0.387       |
| Overbid                 | 0.033       | 0.093       |
| Activating fee          | 3.3 SOL     | 9.3 SOL     |

The fee scales linearly with the overbid. A larger gap above the clearing rate means a larger fee on each unit of activating stake.

#### **Example 2: scaling with activating stake**

Both validators have the same overbid of 0.033.

|                  | Validator C | Validator D |
| ---------------- | ----------- | ----------- |
| Activating stake | 100,000 SOL | 250,000 SOL |
| Activating fee   | 3.3 SOL     | 8.25 SOL    |

The fee scales linearly with the amount of activating stake received in the epoch.

#### **Example 3: same rank, different commissions**

Two validators with the same auction rank but different commission structures.

|                         | Validator E | Validator F |
| ----------------------- | ----------- | ----------- |
| bidPmpe                 | 0.420       | 0.450       |
| auctionEffectiveBidPmpe | 0.387       | 0.417       |
| Overbid                 | 0.033       | 0.033       |
| Activating stake        | 100,000 SOL | 100,000 SOL |
| Activating fee          | 3.3 SOL     | 3.3 SOL     |

Both validators pay the same fee because their overbid is identical. Commission structure does not create unfairness in the activating fee.

## Managing your participation

The activating fee can recur. As long as a validator is bidding above clearing and has room under their `maxStakeWanted` cap, Marinade may continue allocating new stake to them in subsequent epochs. Each new allocation triggers its own activating fee.

Validators have two levers to manage how much new stake they receive, and therefore how much they pay.

* **Lower `maxStakeWanted`:** Setting `maxStakeWanted` at or below current active stake means no new stake will be allocated, regardless of the bid. Existing active stake stays delegated. This is the cleanest way to stop receiving new allocations without affecting bid history. See [`maxStakeWanted` Parameter](/marinade-protocol/protocol-overview/stake-auction-market/maxstakewanted-parameter.md).
* **Lower `bidPmpe`:** Reducing the bid lowers the overbid and the fee per unit of activating stake. It also lowers the validator's auction rank, which in most cases means losing the rank required to win new stake at all. Validators typically need to be first in the rank order to win stake, so a lower bid often results in no allocation rather than a smaller fee. Lowering `bidPmpe` from one epoch to the next can also trigger the [Bid Reduction Penalty](/marinade-protocol/protocol-overview/stake-auction-market.md#bid-reduction-penalty) (`bidTooLowPenalty`). Adjusting `maxStakeWanted` is almost always the better lever.

### When changes take effect

Changes to `maxStakeWanted` and `bidPmpe` take effect in the next auction. Validators should set new values before the end of the current epoch so they are picked up.

### Previewing activating stake

The [PSR dashboard](https://psr.marinade.finance/) shows an estimation of incoming delegation for the current epoch before the snapshot locks. Validators can use it to anticipate the fee before it settles. The dashboard refreshes every few hours, so use the CLI for real-time values.

#### Related mechanisms

The activating stake fee and the [Bond Risk Reduction Mechanism](/marinade-protocol/protocol-overview/stake-auction-market/bond-risk-reduction-mechanism.md) both reference `auctionEffectiveBidPmpe` and can apply in the same epoch, but they cover different situations. The activating stake fee charges validators on new stake won through the auction. The Bond Risk Reduction Mechanism applies when a validator's bond is below the minimum required for their existing active stake.

The activating stake fee is also distinct from the [Bid Reduction Penalty](/marinade-protocol/protocol-overview/stake-auction-market/bid-reduction-penalty.md). The Bid Reduction Penalty triggers when a validator lowers their bid after winning stake. The activating stake fee triggers when new stake activates, regardless of whether the bid changed.

{% hint style="info" %}
For the governance context behind this change, see [MIP-19 on the Marinade Forum](https://forum.marinade.finance/t/mip-19-improving-sam-auction-stake-priority-bond-risk-reduction-mechanism-higher-validator-caps/1969).
{% endhint %}


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